Life was looking good for a Pittsburgh waitress when she was
promoted to maitre d' and pastry chef at the restaurant where
she worked, an uncharacteristic move from ownership that made her
the only woman in a management position there. But within a few
months, it seemed that the promotion must have been a mistake.

She found she was excluded from management meetings and had
difficulty ordering supplies. Later, she discovered the owner and
the general manager had decided they didn't want a woman as
maitre d' because she didn't "fit the mold." She
learned the general manager had boasted she wouldn't be there
long and asked the chef to find a man to replace her. Then the chef
accused her of stealing and drinking on the job--charges, she later
alleged, suggested by the owner of the business. She even found
wine bottles wrapped in an apron, hidden in her locker as if
she'd stolen them. After numerous unsuccessful attempts to
discuss all this with the owner, she finally resigned--then sued
over sex discrimination, claiming that, in effect, she'd been
illegally terminated.

The legal concept at work here is "constructive
discharge," which means the employee resigned because the
employer made conditions at work so intolerable that no one in his
or her right mind would want to continue at the job. In some cases,
it's a legitimate charge brought by people who were forced out
by outrageous behavior on the part of their employers. In others,
it's used by disgruntled former employees trying to find a hook
to hang a lawsuit on. "Constructive discharge is often
alleged, but rarely successful," says employment attorney Paul
Salvatore of Proskauer Rose LLP in New York City.
"[Typically,] you have to prove to the jury that the employer
deliberately created conditions so intolerable that any reasonable
person would quit." Some courts adopt a more objective
standard: that the employer knowingly permitted a pattern of
behavior with the foreseeable result of intolerable working
conditions. Either way, it's difficult for a plaintiff to
prove.

Steven C. Bahls, dean of Capital University Law School in
Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane
Easter Bahls specializes in business and legal topics.

Illegal Termination

Salvatore notes the charge of constructive discharge doesn't
stand alone because it's not illegal in itself to terminate
someone. Unless there's a contract to the contrary, employment
is "at will" in most states, meaning employees may be
discharged at any time for any reason--good or bad--except on the
basis of race, religion, gender, national origin or, in some
states, sexual orientation. You also can't terminate someone if
doing so violates public policy. For instance, it's illegal to
fire a whistle-blower for alerting the authorities to your illegal
dumping or unsafe products.

In the restaurant case, the former employee argued she was a
victim of both constructive discharge and sex discrimination. The
case bounced back and forth between the U.S. District Court and the
U.S. Court of Appeals, but eventually, the former employee won.

Courts have ruled that constructive discharge takes more than
just a demotion, reduction in pay or failure to promote a employee.
Employers have a right to do these things. Constructive discharge
requires a whole pattern of behavior aimed at making conditions at
work intolerable. For instance, says Philadelphia attorney Michael
Ossip of Morgan, Lewis & Bockius LLP, a court might take notice
if the employer takes away the employee's office and secretary,
cuts his salary in half, and assigns him a desk in the boiler
room.

Consider another Pennsylvania case. A female sales
representative was succeeding in a territory with several major
accounts. When she became pregnant, her supervisor told her that he
doubted her ability to combine motherhood with a sales career. When
she returned to work after a miscarriage, she learned that
she'd been transferred to a less desirable territory. Company
executives had promised a lucrative territory in Pennsylvania to a
man they wanted to transfer, and the only other comparable
territory available was already served by a man. Not only was the
decision a slap in the face to the woman, but it resulted in such a
steep drop in earning potential that she resigned--and sued over
constructive discharge and sex discrimination. The court concluded
that the company had sacrificed the female sales rep rather than
the male because of her gender and pregnancy. She was awarded more
than $100,000 in back pay.

Can We Talk?

Jennifer Kearns, an attorney with Brobeck Phleger & Harrison
LLP in San Diego who specializes in employment law, notes
there's no need to force an employee to quit, because most
states presume an at-will relationship unless otherwise agreed.
However, she adds, it's important to cement the at-will
relationship early on, particularly in employee-friendly states
such as California, where courts are willing to consider 10 years
of bonuses, awards and promotions as evidence of an implied promise
of continued employment (unless there's a downturn in the
company or the employee does something seriously wrong).

"If there's no formalization of the at-will
relationship, that sort of case might go to a jury," Kearns
says. She advises having employees countersign letters
acknowledging that you make no promise of continued employment, may
alter job duties at any time, and may terminate the relationship
for any reason as a condition of employment.

There's more you can do to avoid constructive-discharge
lawsuits--or win one if you do get sued. "I see these claims
more and more, as employees and attorneys latch on to the concept
that you can quit and still sue," Ossip says. Some suggestions
from the experts:

If you get wind that an employee considers working conditions
intolerable, find out what he or she finds unacceptable and discuss
possible solutions.

When an employee says there's a safety or environmental
regulation being violated, investigate and resolve the situation.
Do not take action against the employee because of the
complaint.

Be consistent with your own policies and guidelines.

Keep good records so you can document why you decided to
reassign job duties or territories, promote one employee rather
than another, and so forth.

If an employee quits and then alleges mistreatment, send a
letter saying he or she was welcome to stay and wasn't
discharged. "It may help you build a case," Ossip
says.

Most steps you'd take to reduce constructive-discharge
claims come down to good communication, observes Joseph Yamin, a
business lawyer with Beier Howlett in Bloomfield Hills, Michigan.
Your goal as an employer is to have productive employees, so good
communication can only help your business.